Sharing of office premises among the concerns is permissible when only one concern claims the deduction

ITO Vs M/s Dresdner Kleinwort Wasserstein Sec (I) Ltd. (ITAT Mumbai)– Assessee has incurred an expenditure towards the service charges of the shared premises to its group concern which has taken the same on leave and license. As per leave and license agreement, the sharing of the premises with group concern is allowed as contemplated in clause 11 of the agreement.

The intention of the sharing the premises exists right from the beginning as evident from the agreement of leave and license. Even otherwise when the expenditure is claimed by one of the either parties, there is no double deduction then it has no revenue effect if the expenditure is allowed in the hands of the assessee instead of other group concern M/s Dresdner Bank AG. When the CIT(A) has accepted the contentions of the assessee and allowed the expenditure from the date of the occupation of the premises, we do not find any reason for disallowance of the claim of the assessee for intervening period from taking the premises on leave and license till shifting of the assessee from the existing office to the new premises. In the totality of the circumstances, we are of the view that the assessee’s claim is justified and proper and liable to be allowed. Accordingly, we allow full claim of the assessee in respect of the service charges, society charges and brokerage charges when the premises was meant tobe shared by group concern of the assessee as evident from the agreement of leave and license. Accordingly, we allow the grounds of appeal no.2 and 3 of assessee’s appeal.

IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES, ‘H’, MUMBAI

BEFORE SHRI J SUDHAKAR REDDY, ACCOUNTANT MEMBER
AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER

ITA No. 2685/Mum/2005

(Assessment year -2001 -02)

Income Tax Officer Vs M/s Dresdner Kleinwort Wasserstein Sec.(I)Ltd.

ITA No. 3558/Mum/2005

(Assessment year -2001 -02)

M/s Dresdner Kleinwort Wasserstein Sec.(I)Ltd.  V/s Income Tax Officer

ITA No. 6950/Mum/2005
(Assessment year -2002-03)

ACIT V/s Dresdner Kleinwort Wasserstein Sec.(I)Ltd,